The Not-So-Lonely Rider in the Non-Dusty Desert: 'Marlboro Country', the new middle class, and the geography of economic liberalism in Egypt, Saudi Arabia, and Turkey

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(1)EUI Working Papers RSCAS 2008/16. MEDITERRANEAN PROGRAMME SERIES. The Not-So-Lonely Rider in the Non-Dusty Desert: ‘Marlboro Country,’ the new middle class, and the geography of economic liberalism in Egypt, Saudi Arabia, and Turkey. Hilary Cooperman and Relli Shechter.

(2) EUROPEAN UNIVERSITY INSTITUTE, FLORENCE ROBERT SCHUMAN CENTRE FOR ADVANCED STUDIES MEDITERRANEAN PROGRAMME. The Not-So-Lonely Rider in the Non-Dusty Desert: ‘Marlboro Country’, the new middle class, and the geography of economic liberalism in Egypt, Saudi Arabia, and Turkey HILARY COOPERMAN AND RELLI SHECHTER. EUI Working Paper RSCAS 2008/16.

(3) This text may be downloaded only for personal research purposes. Additional reproduction for other purposes, whether in hard copies or electronically, requires the consent of the author(s), editor(s). Requests should be addressed directly to the author(s). If cited or quoted, reference should be made to the full name of the author(s), editor(s), the title, the working paper, or other series, the year and the publisher. The author(s)/editor(s) should inform the Robert Schuman Centre for Advanced Studies at the EUI if the paper will be published elsewhere and also take responsibility for any consequential obligation(s). ISSN 1028-3625. © 2008 Hilary Cooperman and Relli Shechter Printed in Italy in June 2008 European University Institute Badia Fiesolana I – 50014 San Domenico di Fiesole (FI) Italy http://www.eui.eu/RSCAS/Publications/ http://cadmus.eui.eu.

(4) Robert Schuman Centre for Advanced Studies The Robert Schuman Centre for Advanced Studies (RSCAS), directed by Stefano Bartolini since September 2006, is home to a large post-doctoral programme. Created in 1992, it aims to develop inter-disciplinary and comparative research and to promote work on the major issues facing the process of integration and European society. The Centre hosts major research programmes and projects, and a range of working groups and ad hoc initiatives. The research agenda is organised around a set of core themes and is continuously evolving, reflecting the changing agenda of European integration and the expanding membership of the European Union. Details of this and the other research of the Centre can be found on: http://www.eui.eu/RSCAS/Research/ Research publications take the form of Working Papers, Policy Papers, Distinguished Lectures and books. Most of these are also available on the RSCAS website: http://www.eui.eu/RSCAS/Publications/ The EUI and the RSCAS are not responsible for the opinion expressed by the author(s). Mediterranean Programme The Mediterranean Programme was set up at the Robert Schuman Centre for Advanced Studies of the European University Institute in 1998. It focuses on the Mediterranean region. The Mediterranean Programme engages in research with the twin aims of: a) generating intellectually excellent scholarly work; and b) contributing to the general policy debate relating to the flows of persons, goods and ideas between and within the Northern, Eastern, Southern and Western Mediterranean areas. The Mediterranean Programme and its activities have been financed by: Capitalia, Compagnia di San Paolo, Eni spa, Ente Cassa di Risparmio di Firenze, European Commission, European Investment Bank, Fondazione Monte dei Paschi di Siena, and Regione Toscana. The Annual Mediterranean Research Meeting brings together scholars from across the region. http://www.eui.eu/RSCAS/Research/Mediterranean/Meetings.shtml For further information: Mediterranean Programme Robert Schuman Centre for Advanced Studies European University Institute Via delle Fontanelle, 19 50016 San Domenico di Fiesole (FI), Italy Fax: + 39 055 4685 770 E-mail: MedProgSecretary@eui.eu http://www.eui.eu/RSCAS/Research/Mediterranean/Index.shtml.

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(6) Abstract In this paper, we use the metaphor of “Marlboro Country,” and Philip Morris’s real-life effort to promote it, to discuss the shaping of new middle classes in Egypt, Saudi Arabia, and Turkey in an age of newfound wealth and economic liberalism. We show how Marlboro Country was localized to fit each environment, reflecting an implicit dialogue (through market research) between this multinational company and potential consumers. We argue that in Marlboro Country a new kind of global citizenconsumer was envisioned, together with his modern, universal, urban, and young life-style, albeit with a touch of localism. This citizen-consumer’s global aspirations for American-style standards of living, were harnessed, packaged and sold in the dream of Marlboro Country, but without the cultural or political baggage of Americanism. Documentation based on company archives allows an insider gaze into Philip Morris’s global selling strategy, local brand adaptations, and its interaction with social transition in the emergence of mass consumer societies in the Middle East.. Keywords Advertising, branding, cigarettes, consumer society, globalization, marketing, middle class.

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(8) Introduction “A man goes to a grocer and asks (in Arabic), ‘Do you speak English?’ ‘No,’ replies the grocer. He asks a second grocer and receives the same reply. A third grocer answers, ‘a little.’ ‘Good,’ says the man, (still in Arabic). ‘Give me a pack of Marlboros please.’”1 This type of humor, known in Egypt as the “genre of Marlboro jokes,”2 ridiculed a new form of social stratification through consumption. Nevertheless, the joke also alluded to a new type of demand coming from an aspiring, new middle class in the process of making a place for itself in contemporary Egypt and other societies throughout the Middle East.3 Marlboro adapted to this new demand perfectly.4 In fact, as we show throughout the paper, Philip Morris (PM) had exactly this type of consumer in mind when developing entry strategies for international markets.5 Other multinational rivals aimed at more obvious market segmentation; they targeted upper echelon smokers with high quality, imported cigarettes at high-end prices. The trickledown effect, as conventional wisdom would have it, later helped such brands spread across the social spectrum. To compete with each other, and with local production of inexpensive, lower quality cigarettes, some multinational corporations (MNCs) instigated price-cutting in an effort to gain access to less affluent consumers and rid themselves of their adversaries at the same time. PM took a different tack—rather than aiming high or low, it aimed at an up-and-coming social middle. In targeting emerging middle classes in the Middle East, PM further excelled in a delicate balancing act of keeping the allure of the ‘foreign’ element together with just enough product familiarity. This allowed Marlboro to enjoy consumers’ fascination with the “global” coupled with a sense of the “local” and “authentic” when smoking. Marlboro represented a convergence of imagined spaces at the intersection of these two realms. Marlboro was not an imposter, an American brand playing the part of an Egyptian one. Rather, it placed one foot in each world, allowing the Egyptian consumer to straddle both his familiar local space and the international stage. During the 1990s, the way in which imported brands and business models interacted with local economic and cultural realities became a sub-genre in the “global/glocal” debate;6 where the first represented a unilateral MNC penetration and the second offered a softer process of adaptation to local supply and demand. Two celebrated examples come to mind here—Coca-Cola and McDonald's.7 Similarly to McDonald's and Coca-Cola, the introduction of Marlboro in the three countries under study, Egypt, Saudi Arabia, and Turkey, furthered innovation in production, distribution and promotion of goods in those countries, and caused a catch-up process in which local competitors simulated imported models to compete with the new arrivals. Such transitions created significant momentum for wider transformations in local economies. Moreover, like Coca-Cola and McDonald's, Marlboro was a lifestyle commodity; its exchange, or sign-value, eclipsed (or even replaced) its usevalue.8 The branding and advertising of such goods closely interfaced with social stratification and cultural change in emerging markets. Indeed, the Marlboro cigarette was a product with which consumers interacted, on numerous occasions, in close and personal ways. In advertisers’ speak such a product resides within a “high involvement category,” and forms stronger associations between product and user in comparison with lower involvement categories, such as retail establishments or soft-drinks.9 A unique aspect of our research on Philip Morris and its Marlboro brand is unprecedented access to this company’s archive, and those of its rivals. In the late 1990s as a result of the tobacco legal wars in the U.S., tobacco MNCs were forced to put their documents on display and the Legacy Tobacco Documents Library was created to help organize and facilitate the process.10 Such happy coincidence (for the researchers at least) allows a glance into corporate operations to an extent unimaginable for other contemporary enterprises. We mined the archives for sales data, company five-year plans, market research and analysis, board presentations, and correspondence. We attempted an ethnographic approach to reconstructing corporate culture and actions through corporate documents. From this EUI-WP RSCAS 2008/16 © 2008 Hilary Cooperman and Relli Shechter.

(9) Hilary Cooperman and Relli Shechter. perspective, we supplement the current body of research on decoding advertisements, with decoding the advertisers, and their different “regimes of mediation” between the global and local economic and socio-cultural spheres.11 So, do Philip Morris’s operations in the Middle East, and Marlboro’s branding and advertising offer yet another example of global convergence? Or perhaps they represent the glocalization of supply and demand? We argue that they simultaneously do both. In this article, we discuss how PM sold “Americana” without selling America. We argue that the reason for its success, and that of Leo Burnett, its strategic marketing consultant, was its promotion of Marlboro based on principles of American culture—independence, freedom, wealth, prestige and a strong sense of masculinity—but without their cultural specificity. Moreover, starting in the post World War II (WWII) U.S. market, Marlboro gained the upper hand in markets worldwide concurrently with the emergence of mass consumer societies in such markets. We explore this fascinating structural similarity as we study the metaphor created by Philip Morris, i.e., Marlboro Country, to investigate how they did it. Further, we study the emergence of a global consumer society, as envisioned in the promotion of Marlboro Country, consumers’ citizenship in such a Society, and PM’s relationship to them. Marlboro Country reflected an imagined geography anchored to local daily life by new places of sale, points of promotion and consumption. Correspondingly, the Marlboro man was a romantic fantasy infused through Egyptian, Saudi Arabian, or Turkish cultures. Once Middle Eastern states began to privatize their state-run industries and tobacco monopolies, Philip Morris offered citizenship in this new Marlboro “Country,” to which new middle class consumers could subscribe with their petrodollars, private business returns, or foreign paychecks. Philip Morris ensured close identification with the potential consumer-citizen of this Country and catered to him through extensive market research; it sold the dreams on which economic reform was built and created both the physical and metaphysical spaces in which such dreams were enacted. Our paper leverages sociological analysis as it relates to branding.12 What we do in the narrative below is to switch the focus from the study of branding a commodity to a discussion of the “branding” (here we employ the dual meaning of this term), of its potential smokers. The paper, therefore, is about the very concrete ways in which money, talent, and aggressive promotion and distribution schemes created options for novel social stratification and cultural aspirations. However, it is also about how Philip Morris’s entry into the three markets under discussion was influenced by local conditions, constraints and opportunities. What we show is that while carefully making sure to localize its messages, the company had a clear vision of what the new, up-and-coming middle class should be and of a global strategy that molded them into citizen-consumers of Marlboro Country. This narrative starts with a brief discussion on selling Marlboro in the U.S. We suggest that an early experience of consumer development in the U.S. was at the root of PM’s eventual global branding success. Since the mid-1960s, Marlboro expanded worldwide and became the number-one selling cigarette among male consumers who enjoyed Marlboro’s premium taste and the premium lifestyle it promoted in rapidly changing economic environments. Studying three regional markets allows us a broad enough canvas to compare and contrast new middle classes in Egypt, Saudi Arabia and Turkey. It further enables a nuanced examination amidst structural similarity into the emergence of mass consumer societies; the convergence in multinational and local supply-chains and the blending of global and local within different environments.. Exporting Marlboro Country Since its introduction in the U.S. in 1923, the Marlboro brand metamorphosed several times before realizing the success we associate with it today. Marlboro cigarettes were initially sold as “America’s luxury cigarette” in high-end retail establishments like hotels and restaurants. Later, hoping to make a greater impact, PM began targeting female smokers with a “Mild as May” theme line and around 1930 introduced novel accessories like red beauty tips to mask lipstick stains. During WWII, Marlboro sales 2. EUI-WP RSCAS 2008/16 © 2008 Hilary Cooperman and Relli Shechter.

(10) ‘Marlboro Country’, the new middle class, and the geography of economic liberalism in Egypt, Saudi Arabia, and Turkey. greatly increased, but by 1954 the cigarette succeeded in capturing only a quarter of a percent of the market.13 After testing new product features and package designs, Philip Morris decided to reissue Marlboro as a filter cigarette in a cardboard flip-top box with a re-designed logo. Recognizing the need for a new strategic direction in promotion, PM turned to the Leo Burnett ad agency, a relatively small Chicago-based outfit, to assist them with the re-launch of the brand.14 Together, Philip Morris marketing executives and Leo Burnett, owner of the company bearing his name, resolved to transform the feminine image of the brand into a masculine one to maximize market potential by targeting the largest group of smokers: young men. To allow a successful change in the brand’s gender appeal, the first print ad of the new campaign depicted the now famous Marlboro cowboy. Subsequent ads portrayed images of rugged-looking men from all walks of life exposing a tattoo on one hand, signifying a heroic military past. The theme line, “You get a lot to like: filter, flavor, flip-top box,” was used in the national campaign launch in 1955 which achieved immediate success. However, it was not until 1962 that Leo Burnett began to focus solely on the cowboy and situate him in a Western landscape using the Marlboro Country theme. In 1963, the “Welcome to Marlboro Country” campaign launched nationwide and soon achieved unprecedented fame.15 The campaign changed little over the years and continued to drive sales until Marlboro attained the dominant brand position in the U.S and later, around the world.16 In the post WWII era, a time of rapid expansion of mass consumer society in the U.S., Marlboro had captured minds and wallets, offering an intriguing combination of upward mobility demonstrated by conspicuous consumption and embodied by an expansion of the middle class. As Forbes magazine concluded: “Smoking Marlboro is kind of a psychic downpayment on achieving that American Dream.”17 Moreover, the brand connected with a nostalgic, romantic desire for a simpler but heroic past. Men who previously fought battles across oceans found themselves stuck behind desks and though able to make a decent living, yearned for freedom and adventure, which was exactly what Marlboro provided in a package.18 As put in a somewhat sarcastic tone by Nourran Muse, then Chairman and Chief Creative Officer for Leo Burnett: You won’t find a lot of people in deep Texas or deep New Mexico smoking Marlboros. They don’t want to be called Marlboro cowboys . . . You’ll find them smoked in New York and Chicago, big cities. It’s escapist. People don’t want to be in the big cities smelling all this crap with all the blight. They want to be out there in that air with the freedom of the cowboy.19. Marlboro was thus a perfect fit for an emerging “Consumer Republic” and an American way of life.20 When Philip Morris planned on using the same campaign abroad, they were warned against it. It was believed that the cowboy was not a heroic image in other parts of the world, but rather (and perhaps closer to reality) a downtrodden, working man with whom few would aspire to identify.21 Skeptics were proved wrong when the Marlboro campaign effectively galvanized consumers worldwide to rally around the brand and purchase the product. The effect of Marlboro Country was unanimously appealing. Yet, what remains unclear is why Marlboro Country seemed such an attractive destination no matter where a consumer happened to physically be located. What was so universally appealing about the campaign, and what were the local specificities, which allowed the brand to take hold in countries as disparate as Egypt, Saudi Arabia, Turkey and the United States? Lastly, who was the consumer-citizen Philip Morris imagined would populate the imaginative geography of Marlboro Country, and who in actuality was drawn to the vivid landscape and fantasy world that the brand presented? Our answers to the questions above start with the assertion that Philip Morris expanded globally into countries at approximately the same time as the expansion of mass consumer societies around the world. Regionally, and encouraged by newfound oil wealth and economic liberalism in the Middle East, nascent middle classes were undergoing rapid changes reminiscent of those experienced by postwar American society. The Marlboro brand would also be associated with global glamour—an American way of life without the specificity of location (America)—and become a perfect venue for. EUI-WP RSCAS 2008/16 © 2008 Hilary Cooperman and Relli Shechter. 3.

(11) Hilary Cooperman and Relli Shechter. creating socio-cultural distinctions for social climbers. It is doubtful whether Philip Morris foresaw this broad picture when going international. Its decision to expand globally was fuelled by more pressing needs such as a stagnant U.S. market in the fifties and sixties and related health concerns arising from studies linking cigarette smoking to lung cancer.22 A further reason was the enormous potential of overseas markets where smoker consumption was growing at 4.5 percent annually, which was 50 percent faster than in the U.S., as reported at the end of 1973.23 Nevertheless, local considerations, which were gauged through local market research and focus groups, would become major strategic determinants as PM entered regional markets. Philip Morris began its overseas endeavors through exports in 1950, selling a total of 2.1 billion cigarettes primarily through tax-free sales in sea stores, air stores, and to military personnel stationed abroad.24 From 1954 to 1970 Philip Morris’s international sales grew from 5 to 28 percent of PM’s corporate total and beginning in 1961 grew at a compound rate of 33 percent each year to reach $425 million by 1970.25 Within Philip Morris, global operations management was initially assigned based on geographical proximity rather than political (national borders) or economic considerations; a division of Philip Morris International (PMI) called “Europe, Middle East and Africa” managed all three markets under discussion. In 1982, however, Philip Morris’s organizational structure changed, separating Western Europe from the rest. The division of Philip Morris responsible for the Middle East became known as EEMA, representing the European Free Trade Association countries [EFTA], Eastern Europe, the Middle East and Africa, and was managed out of Lausanne, Switzerland.26 Each individual country within this structure had its own manager reporting to the head of EEMA, who in turn reported to the head of PMI. The head of PMI reported to the Vice Chairman of Philip Morris Incorporated.27 In the Middle East, the Marlboro brand achieved notoriety long before Philip Morris began its concentrated effort to enter local markets. Saudi Arabians bought Marlboro cigarettes via Kuwaiti distributors or from American expatriates working in Saudi Arabia in the oil industry before U.S. manufacturers were allowed to export their brands directly to the Kingdom. Similarly in Turkey (and probably in Egypt), smuggled, tax-free Marlboros were sold in the bazaars.28 By the time Marlboro moved in during the early 1970s, the cigarette market was predominantly a “blended” one (referring to multiple kinds of tobacco used in cigarettes); locals had already been weaned off the pure Oriental tobacco formerly prevalent in most areas of the Middle East.29 Philip Morris used Marlboro in the region and elsewhere as the lead brand when seeking entry into markets. Because it was a high quality internationally recognized name, Marlboro represented the best of Philip Morris and held the greatest promise to beat the competition.30 As it sought entry, Marlboro confronted two types of competitors. The first type was local producers who dominated and controlled the majority of the market with low-priced, low quality brands such as Tekel in Turkey, which manufactured Maltepe, and Eastern Tobacco Company (Eastern), Egypt’s state-run monopoly, which produced the popular Cleopatra and Belmont brands.31 The second type was international competitors, particularly British American Tobacco (BAT), RJ Reynolds (RJR), and Rembrandt/Rothmans,32 that vied for the upper echelons of society with their higher priced brands like Camel, Craven A, du Maurier, Dunhill, Kent and Rothmans.33 These two types of competitors posed different challenges and Philip Morris developed aggressive strategies in all three markets to confront them as suggested in a Competitor Report on Philip Morris, written by Brown & Williamson (B&W): Success requires aggression, not just in conventional marketing terms but in all aspects, including the use of trademark law, the use of the law in general, the breaking of industry agreements and the opportunistic use of any tactic which will give them [Philip Morris] a marketing edge over the competition.34. Philip Morris’s official entry into Middle Eastern markets was greatly encouraged by the effects of the oil boom in Saudi Arabia and followed economic reforms in Egypt and Turkey. As a 1986 industry study widely acknowledged: "The development in the Saudi economy caused by the oil boom [in the early 1970s] helped the cigarette industry, which more than tripled to some fifteen billion units. 4. EUI-WP RSCAS 2008/16 © 2008 Hilary Cooperman and Relli Shechter.

(12) ‘Marlboro Country’, the new middle class, and the geography of economic liberalism in Egypt, Saudi Arabia, and Turkey. in 1985.”35 New Saudi legislation in the late 1960s, opening the market to cigarette imports, started the upsurge and from 1968 to 1969 U.S. exports to Saudi Arabia dramatically increased from $1.6 million to $3.7 million.36 Aggressively pursuing the lead in the lucrative Saudi market, Philip Morris's Marlboro quickly overtook Craven A, the leading brand in the Kingdom. In 1975, Marlboro captured 14 percent of the market and increased its purchaser share to 18 percent by 1977. In comparison, Craven A, which began with 21 percent purchaser share in 1975, declined to 16 percent by 1977.37 Overall, PM’s operating income in Saudi Arabia grew from thirteen million dollars in 1979 to fifty-six and a half million dollars in 1984 to make Saudi Arabia one of its most profitable markets and its leading export market.38 In Egypt and Turkey, PM faced local challenges in the form of existing monopolies of local tobacco industries. (Laws in Saudi Arabia prohibited local manufacture). The local players churned out cigarettes at low prices as dictated by their governments. As suggested in a 1983 regional board presentation, such manufacturers were inefficient in global competitive terms and on many levels: “The monopolies are all chronically overmanned and produce poor quality products . . . Consumer satisfaction is not the highest priority though price control is the rule to keep cigarettes affordable.”39 Local governments directly enforced further limitations on imported products: "Protectionism which hinders the sustained growth of our exports is a major characteristic of the area. Governments have to varying degrees imposed prohibitive tariff and other trade barriers to control the level of imports.”40 In Egypt and Turkey, therefore, Philip Morris sought out local manufacture opportunities through joint ventures to combat the increased threat to imports. As we discuss below, in Egypt, fully owned and controlled local production never materialized. In Turkey, Philip Morris eventually succeeded in obtaining majority interest in local manufacture, sales and distribution through a joint venture. In Egypt, Sadat’s infitah (open door policy—beginning in 1974) gave Philip Morris the green light to begin selling Marlboro in the previously closed-off market, but at a price designated by the Egyptian government and distributed by an appointed agent.41 Egypt became a priority market for the company because cigarette imports gradually increased. For example, between 1979 and 1983, the Egyptian import segment grew from a market share of 6.7 percent to an estimated 8.6 percent in 1983. This seemingly small growth was indeed significant in a market with an absolute size estimated at 40.8 billion cigarettes.42 Additionally, as we discuss at length below, PM considered mid and longterm sales to be more important than immediate success; achieving a greater foothold in this market was of primary importance as opposed to immediate profit gains. Protectionism, which stunted maximum growth potential, and resulted in inflated prices (Marlboro was priced two to almost four times higher than the local monopolies’ brands),43 made local production highly desirable. Philip Morris and other tobacco MNCs pushed for joint-venture agreements, but to no avail. In 1986, the Egyptian government imposed a ban on foreign cigarette imports to further increase protective barriers for Eastern Tobacco and to preserve foreign exchange.44 Philip Morris stayed in the market through Marlboro licensing agreements, granting Eastern the exclusive right to manufacture Marlboros in Egypt. PM provided the raw materials for local manufacture of its brands and paid the monopoly five (US) dollars for every one thousand cigarettes produced.45 In Turkey in the 1960s and 1970s, state-run Tekel controlled the tobacco sector, maintaining sole power to purchase, manufacture and market tobacco for domestic sales. The Turkish government both subsidized the tobacco sector and depended heavily on Tekel for 6 to 7 percent of its total revenue.46 Beginning in 1980, however, when Economic Advisor Turgut Ozal (who in 1983 became Prime Minister) proposed revolutionary economic reform, foreign investment opportunities were greatly encouraged. At the end of 1983, the Turkish government gave PM permission to export Marlboro through Tekel which then priced and distributed it.47 Opting to control local production, Philip Morris began discussions with the Sabanci Holding Company, the largest private sector group in the field of finance and industry in Turkey, to pursue a joint venture.48 Later, PM and Sabanci confronted Tekel head on: “Arguing that it couldn’t survive in Turkey unless it had the right to price and distribute its own products, Philip Morris leveraged the one thing it had that the government badly wanted: millions. EUI-WP RSCAS 2008/16 © 2008 Hilary Cooperman and Relli Shechter. 5.

(13) Hilary Cooperman and Relli Shechter. of dollars to invest in the country.”49 As reported in a Wall Street Journal article, its powerful local partner provided no less significant help: In one 1989 showdown with Philip Morris executives at Tekel headquarters here, Tekel executives were refusing to give up pricing and distribution rights. Silent for most of the meeting, Mr. Sabanci rose from his chair and addressed the room with a booming voice that belies his small stature. “Look, this is not to be feared. This is good for Turkey. This is good for you.”50. Before long, Tekel surrendered. In May 1991, a Government Decree liberalizing the market was issued which allowed PM to eventually price and distribute its own product if the company adhered to a few conditions: one of them being that PM would build a factory in Turkey and begin to locally manufacture PM cigarettes in partnership with Sabanci.51 Thereafter, Philsa became the Sabanci/Philip Morris joint operating company. With an initial investment of one hundred million dollars, the two companies initiated the construction of a state-of-the-art tobacco production facility, which was completed in 1993 and later expanded into a two hundred and thirty million dollar factory.52 Later that year, PM won control over pricing,53 and in 1994 established a joint sales and distribution company with Sabanci named Philip Morris SA, comprised of over one hundred and ten licensed operators in over two thousand districts in Turkey.54 Philip Morris SA became fully operational in September of 1994.55 In addition to cooperating with local strategic partners, PM left a great deal of day-to-day running of its enterprise in the hands of local employees, particularly in the early stages of the business. In 1976, about 98 percent of the workforces employed at PM affiliates in the “developing world” were local employees.56 In Saudi Arabia, as part of the kafil (agent, sponsor) system, Philip Morris was required by law to have a local agent to distribute their brands.57 However, the company also valued its new employees’ local expertise and business networks. In any case, Philip Morris made sure to indoctrinate them into Philip Morris institutional practices and ways of thinking through vigorous training sessions. Philip Morris groomed local employees to have one eye on the local market and the other pointed at headquarters.58. Branding the Consumer Targeting an Aspiring Middle Class Philip Morris’s success in entering Middle Eastern and other emerging markets may largely be attributed to innovative branding. Other MNCs developed strategic marketing powerhouses to devise complex business plans and brand strategies and to outsmart one another in capturing the small percentage of high society who could afford their premium brands. They also created value brands to steal share away from local producers. For Rothmans, an early entrant and a foreign leading brand in Saudi Arabia and Egypt, the obvious decision was to appeal to the finer tastes of their constituents through their only comparable product difference: the quality of their premium Virginia tobacco. At the beginning, Rothmans succeeded in this approach. As conveyed in a B&W consumer focus group conducted in 1978, the Rothmans image was “ . . . very superior . . . a prestigious cigarette, heavy and perhaps hot . . . smoked by the serious minded, the upper echelons of society and the professional classes.”59 By constructing these types of associations through advertising, Rothmans captured a traditional, intellectual, conservative type smoker, but in a fairly saturated market. In time, Saudi, Egyptian and Turkish markets all gave way to a majority preference for American blends and Rothmans became “old-fashioned” and “aloof,” losing much of its salience among the young.60 Another international brand, RJR’s Winston, was unable to go head-to-head with Marlboro’s strong image. Suffering in the late 1970s from “ . . . mis-directed and seemingly ineffective” advertising, a weak management team, and little support from RJR headquarters, Winston was unable to grasp a firm foothold in the Middle East.61 In the mid-1980s, RJR tried to catch up by sacrificing short-term profit gains for market share improvement.62 It devised a price-cutting strategy, re-positioning its premium brands far below Marlboro prices and launched new value brands to compete against local brands and 6. EUI-WP RSCAS 2008/16 © 2008 Hilary Cooperman and Relli Shechter.

(14) ‘Marlboro Country’, the new middle class, and the geography of economic liberalism in Egypt, Saudi Arabia, and Turkey. low-priced imports. It further launched an American blend in the low-priced segment called Gold Coast, which imitated Marlboro’s red and white packaging and crest design. In 1986, Gold Coast did manage to gain share in Saudi Arabia and PM, unwilling to tarnish Marlboro’s premium image, used its value brand, L&M to fight back. Philip Morris succeeded in reversing “switching” trends by 1989, and Marlboro began to increase share at the end of 1990,63 proving that most middle class consumers were seeking more than low price from their cigarette brand. Again, in 1993, RJR aggressively slashed prices, using Winston to induce a price war among brands in all price categories. Winston’s price was lowered to compete with L&M in Saudi Arabia, and the local Tekel 2000 brand in Turkey.64 Yet, like Gold Coast, Winston was unable to establish a solid quality image in Middle East markets due to its sporadic advertising messages, value brand pricing, and Tekel’s later refusal to allow Winston to compete at Tekel 2000 prices.65 When looking at PM's strategy in entering Middle East markets, two distinctions stand out from the competition. Most importantly, PM focused on advertising the consumer first and the product second. Moreover, it targeted a fairly non-existent, but emerging middle class consumer rather than the far more populous lower or upper class ones. In devising brand strategies, brands were commonly “positioned” against one another; one brand staked out a territory and another attempted to define and own another territory. Philip Morris, however, had a different vision on branding, closer to the one suggested by brand strategy guru, Peter Kim. In an interview with Fast Company magazine, the late, former Vice Chair and Chief Strategy Officer of McCann Worldwide explained this type of strategy: You find a trajectory at a destination you want to own as a brand. We can't tell you how we're going to get there yet; we don't even know what kinds of products you're going to have. What we have is a vision of where you want to go.66. Following the same logic, PM “directed” its brand rather than “positioned” it, taking it from a high quality American blend cigarette to an escapist fantasy of freedom and adventure.67 But more importantly, in the Middle East PM directed its brand’s audience using the notion of a universal middle class consumer to bring lower-middle class consumers along a trajectory, i.e. marketing and promotions, to become full-fledged “riders” in Marlboro Country. Indeed, Marlboro’s core brand values of independence, freedom, masculinity and adventure suggested an international credo for upward mobility within emerging neo-liberal economic contexts worldwide.68 Furthermore, similar socio-economic conditions, which made the Marlboro dream relevant to an American audience in the past, now took place elsewhere. Because the Marlboro strategy was based on American values rather than America, the dream was easily transferable to other markets. As was believed by Middle East consumers, “Marlboro is smoked regardless of religion, class or nationality, an ‘International’ cigarette.”69 In all three markets as in the U.S., Marlboro used the messaging theme, “Come to where the flavor is . . . Come to Marlboro Country.”70 Inherent in this line was an invitation to consumers to experience a positive translocation to a new place. As we argue below, the Marlboro Country offer to Middle Eastern consumers, however, did not necessitate an American citizenship. More accurately, it offered an alternative dual citizenship: one in the country of origin and one in a world of middle class values and standard of living as represented by the world of Marlboro. PM executives recognized that Marlboro Country was a borrowed theme. They counted first on the increased popularity of TV, cinema and later home video to popularize American-style Westerns and cowboy-hero motifs (see specific example for Saudi Arabia below).71 Moreover, as noted in a William D. Witter report: The Marlboro man has a unique international appeal. As an uncomplicated, natural, free-spirited, easy-to-understand symbol, he also appeals to the upscale, urbanized, industrialized foreign consumer. Since Marlboro advertising does not rely upon provocative slogans or catchy jingles, it has remarkable international adaptability, and we expect it to continue to have long-term consumer appeal.72. EUI-WP RSCAS 2008/16 © 2008 Hilary Cooperman and Relli Shechter. 7.

(15) Hilary Cooperman and Relli Shechter. To put the quotation above in different terms, the iconic figure of the Marlboro man and the idealized Marlboro Country more broadly suited global consumers precisely because they were already experiencing social transition upwards and were therefore easy to “direct.” In Egypt, Saudi Arabia, and Turkey, emerging middle classes were far from being a homogeneous group well versed in global consumer culture. Yet, some structural similarities did exist among them. In all three countries, this group had acquired both more time and resources to invest in consumption and leisure activity and a socio-cultural motivation to do so. As suggested by Egyptian sociologist Mona Abaza, smoking Marlboro signified and publicly displayed one’s newfound status: “For some fortunate Egyptians the infitah transformation was symbolized by boasting of changing from smoking the Egyptian Cleopatra, Nefertiti and Belmont cigarettes to the American Marlboro and Kent brands which cost double if not triple the price of Egyptian cigarettes . . . "73 Sharing a desire to benefit from the Marlboro brand image, a teen in Turkey from a poor neighborhood snobbishly remarked, “None of my friends smoke local cigarettes . . . That would be humiliating.”74 The quotations above represent exactly what Philip Morris was after: to harness the desires of an emerging middle class to the Marlboro cigarette brand. The fact that Marlboro was made with a high quality American blend further represented a real product difference that distinguished the new middle class smoker from smokers of poor quality American blends in local cigarettes, or on the other side of the economic spectrum, stuffy traditionalists who smoked Virginia cigarettes, such as Rothmans. Marlboro’s consistent high quality, smooth taste fit well within a new middle class lifestyle. Consumers translated the taste into a higher order benefit of comfort and enjoyment.75 Finding Marlboro Men Perhaps Philip Morris accidentally arrived in the right place, with the right strategy at the right time. However, upon entering regional markets, its research department left nothing to fate when identifying and defining potential riders. Beginning in the mid-seventies into the present time, Philip Morris conducted and commissioned numerous demographic and lifestyle studies which mined for media and entertainment preferences and behavior as well as uncovering the intricacies of day-to-day family and social life, to understand how to direct the real consumer towards the ideal. In order to achieve this, they recruited research subjects from a large cross-section of the population in all three markets, including all social-economic classes. A distinguishing factor in Philip Morris's approach from other manufacturers of premium brands was their inclusion of rural consumers in their studies.76 PM was looking for future markets, believing that they could define a universal access point into the brand that would eventually speak to a growing number of constituents. In conducting such studies, they discovered the differences and similarities among consumers in the three markets and attempted to address the real cultural differences through tailored marketing messages; simultaneously they reinforced core brand values, moving consumer groups towards acceptance of a more standardized message over time: The strategy is the same in every country, the advertising idea is the same in every country, but the executions are not. In Nigeria, for example, the cowboy is black; in Australia he is an Australian cowboy in the outback; in Hong Kong he is not a cowboy at all but a ranch owner, recognizing the oriental desire to associate with success and material possessions. Everywhere the integrity of the campaign is preserved, and everywhere its full potential is realized by tailoring the execution to the local market.77. This was particularly true in Saudi Arabia and Egypt where in-depth qualitative studies were conducted in 1993 to define the Marlboro consumer’s values and the cultural relevance of worldwide Marlboro print campaigns. For instance, in Saudi Arabia the values of the Saudi male were defined as “ . . . masculinity, wealth, family life, materialism and spirituality.”78 The brand as he perceived it directly mirrored his value-driven aspirations: “—masculine, —for wealthy people, —elegant.”79. 8. EUI-WP RSCAS 2008/16 © 2008 Hilary Cooperman and Relli Shechter.

(16) ‘Marlboro Country’, the new middle class, and the geography of economic liberalism in Egypt, Saudi Arabia, and Turkey. Saudis viewed the Marlboro man as a skilled “horseman” rather than a cowboy, and voiced their admiration and respect for Arabian horses which differed from the wild Western horses depicted in the Marlboro ads.80 Many of the clothing items used in the ads were considered too downscale for the Saudi audience who aspired to elegance rather than rustic machismo. PM’s research consultants reported that: Props in the ads can have negatively marked effects, especially where they have inappropriate meanings in the local culture, or where the cultural connotations are taken quite literally. Such props include the clothing: —gloves should not be shown, —hats should not have rain drops —in a desert country this just looks like dirt, —ropes should not be shown, —rough looking clothing should not be emphasized, —Zippo lighters should not be shown.81. In Saudi Arabia, Marlboro consumers further desired green color and landscapes in ads.82 Philip Morris marketers took notice of these details among others, when they stressed in a Creative Review Meeting that EEMA advertising should show "—[f]resh, beautiful landscapes, more green and water, less dry and dusty":83 details suited to a desert-dweller’s escapist fantasy. They went further by adding in their Creative Guidelines that regional ads should depict the aforementioned “—[g]olden green landscapes” as well as “—[t]he power and beauty of horses.”84 Another difference among Saudis is that they very closely associated cigarette smoking with coffee, food and tea.85 Thus, PM executives decided that more coffee and food moments should be included in print ads.86 In comparison, the values of Egyptians were sorted into two camps. The first was defined as the “[S]hatara” personality: “ . . . more aggressive and selfish . . . ” vs. the “Qana'a” personality which was “ . . . resigned and family-oriented.” The values of the first group were “ . . . manliness, freedom, excitement, skilled control and hedonism,” compared to the second group that valued “ . . . duty, loyalty, sharing, order and elegance.”87 In contrast to the Saudi comments mentioned above, “ —there were almost no negative comments about the clothing [in the Marlboro ad] - this is partly because respondents seemed more comfortable with a jeans culture - partly because they seem better able to see beyond the literal reality into the fantasy.”88 Furthermore, the ropes depicted in the ad were not seen as negative, but rather viewed as a bond between friends and played an important role as props in the unfolding storyline/fantasy.89 Both Saudis and Egyptians shared the view that the Marlboro man should be shown with other cowboys, but for different reasons. The Saudis felt this was important to express social conformity: “Whatever can be done to make the horse a friend, it is important that the Marlboro man can be interpreted as: —having friends, —being stable, —being part of society, not a loner outside of society.”90 The Egyptians believed companionship was important because cigarettes suggested friendship and sharing and a way to connect with friends. The local Cleopatra brand fully delivered on their idea of friendship, most notably because it was cheaper and therefore more comfortably shared among one another.91 Overall, Egyptians seemed better able to imagine Marlboro Country without the literal cues Saudi consumers felt were missing or misrepresented: “Because of the greater appeal that the ads seem to have to [Egyptian] smokers’ fantasies, the range of responses to some ads is considerably greater than we found in Saudi . . . "92 In the margins of one of the Egyptian research summaries discussed above, are short comments expressing PM management’s agreement (“similar to Saudi”), surprise (“!”) and appreciation (“great”). Disagreement is also noted: (“[T]oo much emphasis, expats were not violent . . . ”).93 Reading the annotated document, one senses the dynamic active engagement between researchers and brand strategy executives, exhibiting a type of cooperative creation of Marlboro Country through ongoing focus groups and local input. Marlboro Country was therefore a dynamic construct, rather than one which was fixed or staid. Also, it developed as both a linear brand idea and remained openended enough to allow specific consumer interpretations and incorporations into varied cultural contexts. This was important in speaking to nascent middle classes as it successfully connected their local citizenship to the one in Marlboro Country and allowed them to individually identify with Marlboro brand values in a highly relevant and personal manner. As we suggest below, it further. EUI-WP RSCAS 2008/16 © 2008 Hilary Cooperman and Relli Shechter. 9.

(17) Hilary Cooperman and Relli Shechter. reinforced a middle class lifestyle and expectations brought on by economic transitions in Egypt, Saudi Arabia, and Turkey. Indirectly, PM assisted the development of mass consumer cultures as Marlboro neatly wove itself into the cultural fabric of emerging middle classes.. Training the Rider Developing Local Rider Training Grounds in Cityscapes In all three markets, Philip Morris used its superior sales and distribution teams, tools and budgets to create a real-life infrastructure for Marlboro Country. In Turkey, the only market where PM eventually gained complete control of sales and distribution, they created efficient supply systems in a market where wholesalers were accustomed to making long journeys to the Tekel warehouse to supply their store. Setting a new standard, PM won over Turkish retailers when they dressed their sales force in Cowboy attire to personally deliver cigarettes and build relationships with the storeowners.94 In Egypt and Saudi Arabia, where such transition of wholesale practice was not possible, Philip Morris still managed to heavily influence the way its cigarettes were sold through the retail trade. The company ultimately transformed each sales venue into a Marlboro Country outpost, complete with Marlboro shelving units, cigarette dispensers and newly converted Marlboro Country representatives manning the shop. The novelty of Marlboro signage and paraphernalia was enough to entice the owners to display these items, and to replace old or non-existent devices with fashionable, useful contraptions, giving each store a new contemporary feeling. Prominently displayed red and white chevron logos served as flags, signaling “convenience” and “modernity” in retail and quotidian shopping. This type of ingenuity was highly regarded within the Philip Morris Corporation and held up as an example of excellence by Geoffrey Bible, President of Philip Morris International, in a company report: Evidence of the International’s ability to adjust its promotions to local conditions became evident in Cairo where a potent British rival, Rothmans International, seemed solidly in control of the market. It had erected a great number of conspicuous lampost signs and billboards . . . The [PM] International’s representatives moved in to survey the scene. They discovered a mass of shabby home-made pavilions, called kiosks, inviting use of their exteriors. Philip Morris International accepted the implied invitation to adorn these structures. In a comparatively short time, having obtained the permission of local authorities, the kiosks were painted red, white and black with just one brand name . . . Marlboro.95. In the example above, Rothmans imposed standardized posters and billboards on local cityscapes. Philip Morris valued a different approach, and believed that by face-lifting existing urban consumer landscapes they could better connect to and recruit consumers.96 The transformed neighborhood kiosks further conveyed Marlboro turned middle class values—consistency and ubiquity—establishing new consumer expectations in those markets. Producing Marlboro Country/Middle Class "Moments” Since 1968, a complete media advertising ban was legislated in Saudi Arabia. In 1977, a partial ban was introduced in Egypt. Philip Morris responded by increasing promotions and merchandising expenditures to make up nearly half the marketing budget in Egypt by 1991.97 Sites for promotions were discovered through consumer studies and were chosen for both their upscale locations as well as areas where young, urban adults congregated.98 Such Marlboro Country enactments were by far the most vibrant and effective training grounds to recruit new riders. In Egypt, leisure activities were sprouting up everywhere and Marlboro wished to be identified with these new middle class events. In the words of one PM Executive, “ . . . Wherever people are 10. EUI-WP RSCAS 2008/16 © 2008 Hilary Cooperman and Relli Shechter.

(18) ‘Marlboro Country’, the new middle class, and the geography of economic liberalism in Egypt, Saudi Arabia, and Turkey. relaxing and having fun, that’s where we try to be.”99 PM attempted to weave its promotions into already meaningful, culturally relevant moments in Egypt. It is a common technique of advertisers to identify highly charged emotional moments and integrate and elevate the brand to play a role within those moments. For instance, Kodak represents far more than just picture-taking: Kodak integrates its brand into the creation of family memories. Johnson & Johnson is not only a pharmaceutical company: it plays an important role in nurturing the mother’s bond with her baby.100 Similarly, Marlboro wished to insert itself into moments of middle class enjoyment among peers. One such moment, and a popular pastime associated with modern Egyptian life, was weekend beach going,101 and Philip Morris was quick to capitalize on this occurrence: During the summer the beaches of Alexandria are crowded. Our promotion people are there sampling, talking to consumers or switch selling. Here from the back of one of our promotion vehicles, there from a movable Marlboro kiosk following the action when we do not set it.102. Through this promotion, the expansive imagined world of Marlboro Country was retrofitted locally to include the beach, and by association, imbued the smoking experience with the beach’s positive sensory and emotional ambience. Moreover, this promotion enabled PM to equip its riders with middle class “gear,” such as Marlboro branded sun visors, beach towels, shoulder bags and purses.103 These were the souvenirs they carried away to remind them of the exciting vacation they took to the beach, but also to the center of middle class leisure: Marlboro Country. In 1991 Philip Morris created a national promotion whose stated purpose was to: “Utilize the widespread popularity of backgammon and link it with Marlboro.”104 Discovered in a 1991 consumer survey that backgammon was ranked as the third highest interest area among young Egyptian men,105 PM anticipated that this activity would “. . . reflect wide spread national and social aspirations (emphasis added)”106 and wished to associate Marlboro with these high order aims. The promotion was extended to eight governates to allow for maximum exposure. Each governate held competitions for three days to determine the semi-finalists. Eventually, the competition moved to Cairo, the center of Egyptian urban life, for the national finals. Mini-tournaments were also held to allow even greater numbers of participants and to generate excitement on a national scale. Marlboro merchandise, domestic resort vacations and the Marlboro Cup were awarded to the champions. Like all PM promotions, the Marlboro branded event allowed for sampling opportunities and direct contact with consumers.107 The backgammon promotion provides a good example of the way Marlboro boosted local culture and benefited from it in two ways: through Marlboro sales and also by furthering their universal middle class ideal. In effect, the promotion created a breeding ground for middle class (and Marlboro brand) values. First, backgammon is a solo game, and thereby emphasizes "individuality.” Second, any adult male was allowed to enter the competition, implying "freedom” and egalitarianism. Third, the competition posed a challenge to participants and became an outlet for "adventure." Finally, aspiration was an important component as the event allowed the winner to become a national hero. As if all those elements were not enough to fully cater to and indoctrinate emerging middle class values, the prizes to be won offered a taste of luxury through the beach vacation give-away, and prestige in the form of the Marlboro Cup. The final example of Marlboro promotion in Egypt at a popular mainstream middle class location was the Marlboro Rodeo which took place at the highly visible Cairo Trade Fair. Such an event represented the same strategy as above but in reverse, allowing Philip Morris to introduce Egyptian consumers to Western-style spectacle that enforced Marlboro Country images yet notably in a local venue. This event was highly successful, drawing an audience of over one million people. Stickers saying “I rode the Marlboro bull” were a particular favorite as demonstrated by black market sales after the fair.108 In Saudi Arabia, Marlboro faced more of a challenge in finding/creating recruiting events for potential riders. Because cigarette advertising was completely banned within the Kingdom,. EUI-WP RSCAS 2008/16 © 2008 Hilary Cooperman and Relli Shechter. 11.

(19) Hilary Cooperman and Relli Shechter. promotions needed to reach Saudi consumers indirectly through international and pan-Arab media or write-in type sponsorships and sweepstakes where consumers would save up proof-of-purchase stamps and send them away for prizes. (Philip Morris, however, noted a difficulty with “ . . . the Arabs' reluctance to write in and the proof-of-purchase requirement.”109) Furthermore, in contrast to Turkey and Egypt, the cowboy was not as meaningful of an icon in the Saudi market—the emerging Saudi middle class was initially less exposed to world popular-culture. Therefore, a greater process of inculcation was necessary among Saudis because few emotionally charged, public leisure activities were readily available for Philip Morris to exploit. Instead, Philip Morris actively took part in the transformation of Saudi implicit interests into explicit national pastimes. For example, in regions where American-style Westerns were not as salient or memorable among young audiences, particularly in Europe, PM used motor racing to contemporize the brand. As voiced in an internal PM meeting, management viewed the car racer as the modern day cowboy.110 Additionally, Saudis expressed great interest in cars, (though few expressed interest in motorsports) particularly owning a luxury Mercedes, driving one, or at least riding in one.111 Heavily invested in motorsports, including sponsorship of Formula One racing, the Indy 500 and the popular World of Motorsports TV broadcast, Philip Morris was eager to develop greater motorsports interest to capitalize on the visibility and prominence they already achieved within this arena worldwide.112 Since the early 1980s, PM used a number of tactics to foster an enthusiasm for motorsports in the Gulf. Philip Morris organized pan-Arab and specifically Arab Gulf racing contests like the UAE Desert Challenge.113 They also sponsored Arab drivers poised to win the competitions: We support local Arab drivers with a Marlboro-Middle East rally championship team and jointly with Toyota, we established a rallying team in the Gulf. The team is winning this year. Saudi Arabia provides a striking example of how it is possible to grow profitably in markets where advertising is completely banned.114. To further develop mass interest in motorsports, the company exhibited a simulator of a Formula One Marlboro car at a motor show in Jeddah, which attracted large crowds.115 Finally, to link racing back to the Saudi interest in cars as well as an expressed desire to travel abroad, PM created a rally racing school sweepstakes to a top-notch facility in the UK.116 Besides an interest in cars, Philip Morris found that movies and watching videos at home were popular leisure activities among Saudis. Two marketing activities leveraged the general interest in cinema and the more specific one of home video viewing. The first attempted to expose Saudi consumers to the Marlboro brand, while encouraging enthusiasm for and exposure to Westerns: “Home videos are popular. We saw this as a new opportunity to promote Marlboro. We have an agreement with a private distribution company for video cassette rentals and are now developing commercials, incorporating Marlboro branding, to advertise the distributors’ extensive library of ‘Westerns.’”117 Another Marlboro event which leveraged the Saudis’ desire for glamour and prestige was the invention of the “Marlboro Horseman Awards.” After determining that Cyprus-based Radio Monte Carlo had a high percentage of Saudi listeners, PM relied upon the station to launch the Awards and later, due to the popularity of the contest, expanded it to include pan-Arab newspapers and video stores. The idea was to launch a promotion where Saudis and other Arabs would call-in to the radio station, or send in an entry card to vote for their favorite Arab film actor or actress. In doing so, they were also entered into a drawing to win a ten thousand dollar prize. Philip Morris organized a special awards ceremony with the Egyptian Chamber of Cinema to present trophies to the Horseman Award winners. Lastly, PM distributed video cassettes to video store owners in Saudi Arabia and throughout the Gulf so that any Saudi could see highlights from the award ceremony at a nominal price, making Saudi viewer-ship possible at every socio-economic level.118 As in Egypt, PM attempted to include as many Saudis as possible, envisioning them all as potential Marlboro riders. Ultimately, by molding Saudi interests such as motorsports, Westerns and film 12. EUI-WP RSCAS 2008/16 © 2008 Hilary Cooperman and Relli Shechter.

(20) ‘Marlboro Country’, the new middle class, and the geography of economic liberalism in Egypt, Saudi Arabia, and Turkey. awards, a new middle class learned interests and values modeled after Philip Morris’s universal middle class idealization. However, in contrast to conventional globalization discourse, Philip Morris didn’t import a fixed, fully conceived, American or Western cultural agenda and lifestyle into Saudi Arabia. Instead, they located Saudi interests and developed marketing activities which augmented them. PM’s marketing operations got off to a late start in Turkey, compared with the other two markets. However, Marlboro enjoyed tremendous popularity without much advertising, due to borrowed interest from its contraband days when Marlboro was smuggled into Turkey and sold in local bazaars, as mentioned earlier in this paper. At a time when Marlboro was successful without much backing, Philip Morris may have decided to put their marketing dollars elsewhere to bolster other markets, or to support low tar and nicotine (LTN) brands such as Marlboro Lights, which had a better future as health concerns began to affect brand choice. Regardless, in approaching promotion in Turkey, Philip Morris took a far more standardized approach to marketing than in Saudi Arabia and Egypt. Global promotions such as the Marlboro Adventure Team, Marlboro Bar Nights, Marlboro music videos and the Marlboro Country Store were first used in the U.S. or Europe and shipped over to Turkey a few years later.119 Standardization may be partially attributed to an attempt to resolve inter-organizational divisions caused by declining Marlboro share in major international markets, including Turkey at the end of the 1980s, moving into the 1990s. In response, global affiliates took marketing strategy into their own hands, resulting in severe inconsistencies in brand management. An additional factor, as a key PM report, Marlboro: For the 90s and Beyond, pointed out was that several markets attempted to “. . . contemporize the image – ‘pushing the envelope’ as it were, on what themes and executions could be a part of the Marlboro campaign."120 Nourran Muse expressed his frustration with local initiative: . . . [W]e’ve got all these 28-year old brand managers around the world telling us what makes Marlboro tick. In truth, most of these people don’t understand Marlboro. They don’t have the soul for it . . . “ Muse complained of German advertising executives who tinted shirts red and tinted grass red because they thought red sold Marlboros. Latin American executives didn’t like snowtipped mountains because that was not common there. A Chinese manager wanted to avoid night shots because of local superstitions . . . “All these compromises . . . I was asked at one meeting, ‘Why can’t the cowboys be more joyous?’ Because they’re not joyous. They’re taciturn and stoic and heroic and you don’t see a lot of laughing heroes. When you think about it heroes don’t laugh a lot . . . I know what Marlboro Country is, and there are three or four of us around who still do. Describing it is like describing art. Why it works is, it captures the spirit of an alienated country that no longer has that spirit, and it recaptures lost time.121. As the creative borders of Marlboro Country blurred and distorted, so did the brand’s expression from market to market. As suggested in the above report: “. . . [A]s a result of these events, by 1992 Marlboro's performance had lost momentum."122 Regionally, Marlboro share was in decline for the first time, caused primarily by a price war brought on by RJR as mentioned earlier in this paper. Another factor was the development of “Young Image Brands,”123 particularly Tekel 2000 in Turkey (see further below).124 In Egypt, Saudi Arabia and Turkey, compounding inflation in addition to higher excise taxes in the Saudi market, increased price gaps between the lower-end local and value brands, and premium brands. A final trend which further eroded Marlboro share was increasing health concerns, similar to those which arose earlier in the U.S. and spurred greater movement towards LTN brands among higher educated consumers. Some of these “switchers” remained in the Philip Morris family. In the Saudi market, for example, Marlboro Lights became very popular. However, others moved to competitive brands like Silk Cut, Barclay, and Gold Coast Lights. As suggested by an unidentified Corporate Head of PMI, "All these events caused us so much concern that many of our managers began to seriously question the ability of Marlboro's image to sustain our Young Adult share and premium price."125 In Turkey, a further contributing factor of Marlboro’s decline was Burnett’s partial inability to effectively execute ‘Below-the-Line’ (BTL) initiatives, referring to direct advertising activities such as. EUI-WP RSCAS 2008/16 © 2008 Hilary Cooperman and Relli Shechter. 13.

(21) Hilary Cooperman and Relli Shechter. Marlboro events and promotions. In a 1989 company memo detailing issues to be addressed at a future PM presentation for Leo Burnett’s account directors, some of PM management’s concerns were raised: “The weakest aspect is LB’s [Leo Burnett’s] limited ability to assist in implementation of BTL activities. This is due either to being located outside of the market (e.g. Switzerland) or to a lack of local expertise (e.g. Turkey).”126 Leo Burnett’s difficulty with the Turkish market was not the only inter-agency dilemma either. Philip Morris experienced a rocky start with a Turkish agency hired to deal with Marlboro outdoor advertising when they painted the Marlboro chevron and package out of proportion and provided the wrong size panels for light box displays at Istanbul airport. Similarly, PM experienced difficulty procuring satisfactory four-color print ads from local newspapers.127 Alongside increased marketing pandemonium worldwide, Leo Burnett conducted a global study among young adult smokers that began to lead Philip Morris towards a new way of thinking about their brand strategy and management. Since 1984, Leo Burnett began to advocate a blanket, global strategy: “The current trend worldwide for multinational brands such as Marlboro seems to be toward standardization in terms of both advertising strategy as well as execution.”128 A year earlier Theodore Levitt forcefully put forth this thesis in a seminal article entitled “The Globalization of Markets” in the Harvard Business Review (May-June, 1983) indicating the beginning of a pendulum sway from market-tailored to global brands in the MNC world. Executives at Burnett enthusiastically reported that, “Today, young adults [are the] single most homogeneous group in history,” resulting from mass exposure to the same media content.129 By 1993, when Philip Morris finally gained control of its pricing from Tekel, PM was already in the process of adopting a uniform global strategy by attempting to standardize its marketing activities. In that same year, the Marlboro Worldwide Creative Review Committee (MWCRC) was formed with marketing representatives from the heads of each region, including PM USA. At the meeting a standardized creative brief was designed, a global standard on advertising themes and executions was decided upon, and a new standardized research tool was created to extend the coverage and depth of brand monitoring.130 Under the new drive for standardization, and consequently misjudging potential Marlboro Country citizen-consumers in Turkey as similar in their aspirations to European ones,131 PM recycled many of the European promotions and sponsorships for the Turkish market. Bar Nights, Marlboro music videos and the Marlboro Adventure Team promotion were not used in Egypt or Saudi Arabia,132 but Turkey seemed the perfect environment to generate excitement through promotional activities that succeeded in Western markets. The fact that Turkey did not have a heavily restricted marketing environment in comparison with more mature European markets, also allowed previous European campaigns to be recycled in the Turkish market through cinema advertising and high-image outdoor displays. By attempting to globalize markets (and consumers) and making seemingly fewer attempts to develop an in-depth perspective on a local consumer mind-set than in other markets,133 Marlboro missed the boat, so to speak in its Turkish marketing. There was much confusion regarding where exactly to locate the Country within a worldwide marketing scheme. As Turkey was viewed as a younger, less mature European market, it was often separated out in reports as “Turkey/Middle East/Africa,”134 and occasionally also grouped with Central European countries and other “expansion” markets as diverse as Japan, Korea, Poland and Brazil.135 Turkey’s distribution system was used, in the meantime, as a model for the Czech and Slovak Republics’ distribution.136 Moreover, Turkey had not yet developed some of the conventional events through which PM created its Marlboro moments. For example, PM attempted sponsorship of rock-concerts, but discovered that rock concerts were rare at that time because Turkey was still considered “off the beaten track” for touring groups making their rounds in Europe.137 In Turkey, a westernized/globalized, consumer-citizen of Marlboro Country was yet, if ever, to be fully-fledged. Perhaps more significant, the newly developed and telescoped “global market” approach. 14. EUI-WP RSCAS 2008/16 © 2008 Hilary Cooperman and Relli Shechter.

(22) ‘Marlboro Country’, the new middle class, and the geography of economic liberalism in Egypt, Saudi Arabia, and Turkey. combined with executive miscalculations of local socio-cultural realities, overlooked a large segment of the emerging middle class in Turkey. This group was more “traditional” and Islamic in its worldview, albeit certainly not immune to the charms of American-style consumerism.138 From a different perspective, PM lost its edge directing potential consumers because it failed to meet them halfway (capitalizing on local moments and authenticity) in the trajectory to the promised dream. Marlboro was and continues to be a prominent status brand in the Turkish market. However, the inability of Philip Morris to train its riders in Turkey and fuse their new specifically Turkish middle class aspirations to the universal brand values of Marlboro Country was a factor in the rise of Tekel 2000. Launched in 1988, Tekel 2000 overtook Marlboro’s number two position in the market by 1992, and continued to grow, almost doubling sales between 1991 and 1992.139 Tekel 2000’s success was partly the result of Tekel’s leverage in pricing—up until 1994 it monopolized all cigarette distribution and priced Marlboro 31 percent higher than Tekel 2000.140 Nevertheless, the launch of Tekel 2000 was also a good example of local catching-up as Tekel developed the technology and marketing acumen in selling its new American blend cigarette to Marlboro’s would-be smokers. In a 1992 General Consumer Survey comparing the two brands, Tekel 2000 nearly equaled Marlboro on every attribute, including “masculine appeal” and exceeded Marlboro on “product quality,” “taste satisfaction,” “price/value,” “youthful,” and “popularity.”141 Tekel was able to reverse a trend by selling a local cigarette with a touch of the global brand, whereas PM failed to promote Marlboro through better localization of the global brand to local demand. The sickly-man on the Bosporus, to use a historic metaphor, began beating Philip Morris in its own game.. Conclusion When markets opened to imports, superior product quality allowed multinationals to gain a competitive advantage against local monopolies, particularly as a growing portion of consumers acquired more wealth to pay for higher quality cigarettes. On the whole, Philip Morris achieved greater success than its international competitors because its branding vision perfectly aligned with (or perfectly timed) entry and operations in emerging markets. It reaped much benefit from the new approach of focusing on the up-and-coming middle. Further, by simultaneously learning from and directing middle class aspirations and desires, and equating them with Marlboro’s flexible sign-value, Marlboro Country proved a concept expansive enough to contain disparate environments while maintaining a linear storyline. Philip Morris’s absolute focus on marketing and distribution activities alongside its financial resources, readily committed to amplifying its messages, further solidified its dominant position over both international and local competitors. Marlboro Country came to represent the imagined geography, demography, and way of life of economic liberalism and the consumer promises it entailed. Its geography enmeshed out-of-city, conquer-the-nature scenes together with exclusive, leisure inner-cityscapes. Its citizen-consumers were characterized as archetypical young males, urban, and socio-economically up-and-coming. Their “ride” stood for economic mobilization and the social entitlement (freedom) associated with it. This exterritorial fantasy, however, was tailored to cater to specific socio-cultural locations in Saudi Arabia, Egypt and Turkey—those of newly emerging middle classes who wanted their Marlboro Country tinted with a touch of localism. Throughout the text we emphasized that Marlboro Country was not to replace nationally imagined communities with commercially imagined ones. To avoid a potential conflict and consumer cognitive dissonance as a result of such dual membership, Philip Morris adjusted Marlboro Country to fit the local, seemingly real country of citizenship. In all three markets, smoking the Marlboro cigarette was equated with being suitably modern but local, albeit in different ways.142 In Saudi Arabia, the newness of Marlboro Country paralleled the newness of a local consumer culture. Philip Morris found its advantage by developing Marlboro Country moments within close proximity to interest, most notably in the area of motorsports. Furthermore, the gap between global and local was initially greater, and therefore PM adapted its EUI-WP RSCAS 2008/16 © 2008 Hilary Cooperman and Relli Shechter. 15.

(23) Hilary Cooperman and Relli Shechter. vision of promotion more thoroughly to local conditions than in other places. For Saudi consumers, Marlboro Country also required immaculate detail—its geography, horse, and rider were to be ennobled and refined. Egypt already defined a tradition of blended modernity, an earlier experience in consumer culture, and available moments through which Marlboro Country could be established. This setting allowed Philip Morris shortcuts in promoting Marlboro Country by dovetailing the fictional setting to fit already existing scenes of leisure and conspicuous consumption. The art of creating Marlboro Country in Egypt, therefore, mostly called for continually invigorating such moments with Marlboro imagery and spectacular events. In Turkey, to create Marlboro Country was an especially confusing task. Turkey had both a tradition of modernity and local consumer culture, perhaps more so than in Egypt. However, Philip Morris seemed to get the wrong impression that an aspiring Turkish middle class was synonymous with the archetypal universal one it previously constructed as the consuming “ideal.” This was perhaps true in the past, but an older, Western-style modernism was eroding and “go West young men” (to Europe as well as to Marlboro Country) became less appealing.. 16. EUI-WP RSCAS 2008/16 © 2008 Hilary Cooperman and Relli Shechter.